Dearborn Heights Mayor Daniel Paletko addresses the crowd at the State of the City Address Jan. 11.

By DANIEL HERATY
Times-Herald Newspapers
HEIGHTS — New business and redevelopment are among the things residents can look forward to in 2011.

At the annual State of the City Address at Warren Valley Golf and Banquet Center Jan. 11, Mayor Daniel Paletko talked about upcoming signs of progress, as well as the difficulties facing the city.

“I’m pleased to report that the city of Dearborn Heights is in good shape and is well-positioned to meet the challenges facing us,” he said, adding that the latter are substantial.

Community Development Block Grants, administered by the U.S. Department of Housing and Urban Development since 1974, may be cut by up to 25 percent in the upcoming federal budget, Paletko said.

“And property values in Dearborn Heights and all southeast Michigan have just not stabilized.”

Those values fell by 15 percent in 2009 and are expected to reach 10 percent in 2010, the mayor said.

“Just think of having your paycheck drop 25 percent and trying to live the same standard of living,” he said.

One way to combat the country’s financial mess, the mayor said, is more American Recovery and Reinvestment Act funding. Saying that people who spend money influence the economy by supplying another’s earnings, he believes the economy as a whole will get better with more aggressive deficit spending.

“While the president and the last Congress’ policies have limited the damage, they were too cautious, and our country’s unemployment remains disastrously high,” Paletko said.

He compared today’s state of affairs to the time just before World War II, when the United States found itself mired in the Great Depression. Back then, he said, government spending, acting in concert with the war, helped the economy fix itself, but that has not been the case with this new economic crisis.

“(President Barack Obama’s) economic advisers promised not to repeat the mistakes of 1937, when President Franklin Delano Roosevelt pulled back economic stimulus too soon,” he said. “We’re reliving the past over and over.

“It is possible — indeed necessary — for the nation as a whole to spend its way out of debt. A temporary surge of deficit spending on a sufficient scale can cure problems brought on by past excesses.”

Locally, Paletko said the city will have to cut costs by about $2 million, on top of employee concessions that already have been made — placing all employees on one health care plan and an early retirement program.

“We’re still working with the other unions, and are confident that they too will agree to our new health care proposal,” he said. “When all this is completed, the savings from the health care premiums should mask the loss from property tax revenue.”

Paletko then delivered some positive news for the city, centering on business growth and the use of renewable energy.

“Last year, over 100 new businesses came to the city,” he said, listing Motor City Auto Clinic, the Mattress Outlet, Fairlane Eagles Club, the DMC Specialty Center and Spectrum Homes Services.

And because of one resident’s persistent questions, Paletko said he was most excited that a Tim Hortons will take the place of an empty gas station on the corner of Telegraph and Warren, on the northeast side.

On the renewable energy front, he said the city is exploring using geothermal heat pumps as a way to provide energy to homes and businesses. The pumps work by getting heat from the ground, instead of using cold air. The heat comes through the pump via underground piping. In the summer, the process is reversed to provide cooling, as well as hot water.

“What this means is you can heat or cool your home or business much cheaper than using natural gas,” Paletko said.

If that venture can move forward, he said, the federal government will give tax credits to residents or businesses who are interested in installing the technology.

Paletko ended by saying 17 houses that the city obtained through the Neighborhood Stabilization Program will be sold or demolished.

“I believe it was a good decision to apply … and it has given the city a means of stabilizing our neighborhoods,” Paletko said.

The speech, sponsored this year by Oakwood Health Care System Inc., has been held each January since 2006.